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April 30, 2024

House Advances New School Finance Formula to Increase Equity in School Funding, Support Rural Districts

DENVER, CO – The House today advanced a bipartisan bill on a preliminary vote to support Colorado students. HB24-1448, sponsored by Speaker Julie McCluskie and Assistant Majority Leader Jennifer Bacon, would update Colorado’s outdated and inequitable school finance formula by increasing funding for rural schools and at-risk, special education, and English Language Learner students. 

“This bill is a monumental step forward for public education in Colorado. The new, student-focused public school finance formula will increase funding for K-12 education and drive more resources to at-risk students, English Language Learners, special education, and rural school districts,” said Speaker Julie McCluskie, D-Dillon. “For far too long, our school finance formula has not invested in the students with the greatest needs, underfunding rural districts and those serving more children in poverty; now is the time to get this right and drive equity into how we fund our schools. Every student deserves a world class education no matter where they live, and with this bill, we will live up to our promise to set all Colorado students on a pathway to thrive.” 

“With our historic buy-down of the budget stabilization factor, this is the time to update Colorado’s 30 year-old inequitable school finance formula because every student in every community deserves our investment,” said Assistant Majority Leader Jennifer Bacon, D-Denver. “When it comes to public education in Colorado, we have not been meeting the needs of our most vulnerable students, including our at-risk, English Language Learners, and special education students. This is the best opportunity we’ve had in decades to direct additional dollars to the districts and classrooms serving students the greatest needs. When we invest in high-quality education, we’re investing in our future, and I’m beyond proud to be championing a bill that prioritizes student outcomes and opportunity for every child in our state.”

HB24-1448 is also sponsored by Senate Minority Leader Paul Lundeen, R-Monument and Senator Rachel Zenzinger, D-Arvada. It would update Colorado’s school finance formula which has not been significantly modified in 30 years. 

The current formula, which is built around district-centered factors rather than student needs, is confusing and overly complex. It directs more funding to wealthier districts, rather than directing funds to low-income students, English Language Learners, or those in special education. State data shows that at-risk students, English Language Learners, and special education students are not achieving at the same levels compared to their peers, demonstrating that the current school funding formula from 1994 does not address and meet the needs of these students

This legislation implements the spirit of the recommendations of the School Finance Task Force, which reached overwhelming consensus, in order to drive more resources to the students who need them the most, specifically at-risk students, special education students and English Language Learners. 

With hundreds of millions of additional dollars now going to public schools in Colorado, these changes, which would take effect for the 2025-2026 school year and implement in a gradual phase-in over 6 years, will drive more of these new resources to historically underfunded districts with lower property wealth and that serve a higher number of at-risk students and English Language Learners. When fully implemented, there will be $866 million in the formula for our at-risk students, $142.7 million for English Language Learners, and $240 million in the formula for our Special Education students, in addition to the constitutionally-required $375 million in the Special Education categorical. 

The new formula puts students first by increasing the student weights for at-risk, English Language Learners, and adding a new special education factor. At-risk, English Language Learner, and special education weights will all be set at 25 percent, an increase from the current 12 percent weight for at-risk, 8 percent weight for English Language Learners, and no weight for special education in the formula. Smaller districts with a concentration of 70% or higher at-risk students would receive an extra 7 percent, to total 32 percent, ensuring their high concentration of at-risk students get the additional funds they need. Funding for every district would increase by at least .5 percent. The categorical funding for special education will continue to increase according to law and Amendment 23.

The new formula is simpler and better accounts for district characteristics by fixing the “Order of Operations” to emphasize student needs. It removes the multiplicative factors that change the base funding per pupil, which currently creates cascading funding impacts throughout the formula that are challenging to track. Instead, factors that increase funding for small districts or districts with high cost of living will be additive and easy to understand. It also creates a new remoteness factor to support rural schools and will hold harmless any districts that drop below current law funding. 

Access the school finance simulator here to see individual school district impacts.

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